Telcos face class action over late payment fees

01.Class action launched over late payment fees

A week on from posting an after-tax profit of $4.28 billion in the last financial year, Telstra is now facing a multimillion dollar class action targeting its late payment fees.

Telstra customers who have paid a late fee to the giant telecommunication company are set to benefit from the legal proceedings, initiated by specialist law firm ACA Lawyers. It will be argued that the penalty fees are illegal as they're not indicative of the actual loss to the company caused by the late payments.

Class actions against other major telcos Optus and Vodafone, who charge similar late payment fees, have also been announced.

These latest class actions are about justice for the clients of Australia's major telcos, according to Steven Lewis, principal with ACA Lawyers.

"Last week Telstra announced a massive profit which is built in part on revenue from late payment fees often collected from families who can least afford it," Lewis said.

"Since 2000, hundreds of thousands of Telstra customers have paid late fees in the mistaken belief Telstra was entitled to charge the fee.

The action follows a partial victory against ANZ in February when the Federal Court ruled that its late payment credit card fees were illegal and called for ANZ to reimburse about 43,000 customers for penalty fees as high as $45.

"We will argue this is the same for the late payment fees charged by Telstra, Optus and Vodafone," said Lewis.

Telstra's annual financial report indicates that the revenue from "late payment and miscellaneous fees" was a tidy $272 million in the 2014 financial year.